1) SLPEs in Kerala are marginal players in their structure fields. Some sectors like Titanium
have the potential to create fortune 500 SLPEs in Kerala. This policy hopes to convert that dream to
a reality.
2) Government will facilitates strategic tie up with reputed State and Central Government
organizations with a view to tap new markets, technology support and appropriate participation in
growth and development of SLPEs.
3) Government will encourage merging of SLPEs having same lines of business.
4) Government reiterates its commitment to protect productive employment in SLPEs.
5) Professionals will be appointed as Chief Executive Officer (CEO) in SLPEs.
6) To facilitate implementation of the best practices in Board level, Governance of SLPEs,
the Director Boards will be strengthened with representatives of Banks, professional institutions
and domain Specialists.
7) Constitution of Board Level Committees as per relevant statues will be ensured.
8) For effective monitoring of restructuring plan implementation and performance of
SLPEs, an internet based performance Monitoring System will be set up in Public Sector
Restructuring and Internal Audit Board (RIAB).
9) Profitability linked incentive schemes and profit linked incentive schemes will be
implemented mapping with the responsibilities of various organizational levels.
10) Constitution of a state level Core Committee for PSU Restructuring involving bankers
with RIAB as the technical secretariat and constitution of similar SLPE level committees is a step
in strengthening the interface between the SLPEs and the Government.
The following measures are to be adopted to speed up industrial growth in the state.
TRADITIONAL SECTOR INDUSTRIES
Modernization of traditional sector will be ensured to tap National/ International
market and to create more employment to local people, especially women. The following
are the important traditional industries together with measures taken by the government in
the policy to promote them.
HANDLOOMS
Strengthening existing Handloom clusters with financial, technical and managerial
assistance to sustain the cluster base.
Developing of regional brands and location specific brands for high quality
Handloom products to meet domestic and international needs.
Encouraging domestic usage of Handloom/ Khadi products through Mass
Campaigns and to bring back to focus the cultural aspects of traditional dressing.
Development of high quality infrastructure facility for Handlooms for pre-loom
processing, loom processing and post-loom processing.
Strengthening quality raw material distribution system
Ensuring smooth credit-flow to the sector through cooperatives and other
Institutions.
Revitalizing of Handloom co-operatives, Hantex and Hanveev and approved cluster/
consortium by special economic, technical and managerial support projects for a
result based production and marketing and to convert them into agencies of change
and growth instead of becoming a drain on resources and a favourite on weavers.
TEXTILE SECTOR
The Textile Mills in the public Sector and co-operative sector will be re-engineered
to make them self-sustainable. Private Sector Mills will be encouraged to expand.
TECHNICAL TEXTILES- To capture a reasonable share in the growing prospects
for technical textiles worldwide, special efforts will be made.
MADE-UPS-The made-up sector, which has got immense growth, will be
encouraged.
POWER LOOMS
Special projects will be launched for technology up gradation of power loom
Clustering of facilities will be extended to achieve highest level of production.
The demonstration cum training centre of Directorate of Handlooms & Textiles will
be upgraded to Kerala Institute of Power loom Technology with Budgetary support.
HANDICRAFTS, HERITAGE PRODUCTS & SOUVENIR INDUSTRY
Project based support will be rendered to Apex organizations in Handicraft sector.
Cluster based Development, modern production tools to reduce costs, targeting the
global market and promotion of entrepreneurs in the business of production and
marketing of handicrafts will be encouraged.
Skill Development Training and common Facility Centers for the provision of
commonly needed but expensive equipments and professionalism in marketing.
Heritage homes and souvenir industry for our state will be developed.
Resource and market focus design for handicrafts products.
COIR
To ensure conversion of minimum 50% husk produced in the state into fiber and to
promote raw husk defibering mills in hinterlands in private sector and co-operative
sector. Defibering Mills set up under ICDP will be revived.
Raw material and marketing Consortiums of small scale producers, Co-operative
Societies under Cluster Development Programme.
A brand image for Kerala Coir will be created to tap the internal and export market
of Coir Products.
Modern coir factories will be set up in co-operative sector.
Kerala State Coir Marketing Federation Ltd. (Coirfed), Kerala State Coir
Corporation and Foam Matting (India) Limited will be restructured to make it selfsustainable.
Special thrust for Geo-textiles Development Programme.
KHADI & VILLAGE INDUSTRIES
Usage of Khadi / Handloom products will be encouraged by all sections in our
states.
It mainly sells the product of the Village Industries through its outlets in different
part of the state. Special assistance will be provided to the sector to help the rural
communities set up industrial units with minimal investment and yielding good
returns through Khadi % Village Industries Board. (KVIB).
SERICULTURE
Effective steps will be taken for providing adequate forward and backward linkages
by establishing cocoon marketing arrangements in all districts, quality linked cocoon
purchased system, arrangements for timely reeling of cocoons, production and sale of silk
yarn, fabric and garments.
BAMBOO
The Government shall continue to support these programmes through the state
Bamboo Mission. Also the activities of Kerala State Bamboo Corporation will be
strengthened with the support of technology adaptation and development.
It aims to achieve a tremendous growth of industries in our state. The vision of the
government is to convert Kerala into an investment friendly destination and to achieve constantly
high economic growth with specific thrust to social objectives, without adversely affecting ecology
and environment and to create employment opportunities for the people in Kerala and ensuring
them fair wages.
OBJECTIVES
1) To convert Kerala into a favored destination for manufacturing, agro processing, health
services and knowledge based industries and services.
2) To enable growth, revival and diversification of state level public enterprises.
3) To strengthen and modernization of traditional industries.
4) To accelerate the fast growing services and commerce sector.
5) To develop Kerala as a global centre of excellence with state of the art education and skill
sets and preparing a pool of multi skilled, technically competent individuals and
organizations.
6) To sustain industrial and economic growth by facilitating accelerated flow of investment.
7) To create additional employment of 5 lakh persons in the manufacturing and service
sectors.
STRATEGY
To develop Industrial infrastructure facilities in various locations of the state through
KSIDC, KINFRA, DIC, SIDCO and private sector.
To move towards a low tax, high growth regime.
To exploit mineral wealth of Kerala in a scientific manner through Public Sector Enterprise.
To attract Foreign Direct Investment with specific criteria.
To improve investment climate through investment protection, decentralization, facilitation
and by creating more growth opportunities.
To promote local entrepreneurship through institutional mechanism and mass participation.
To help facilitate establishment of specialized skill development institutions at key locations
suitable for manufacturing, knowledge based industries.
To restructure and retain potentially viable State Level Public Enterprise (SLPEs).
To encourage Industrial Corridors/ Cluster Development in potential locations.
To work in coordination with chamber of commerce/ industry associations and other trade
bodies to have continuous feedback on the state of industries and commerce and the support
measures required.
There are more business opportunities here due to the following reasons.
The Kerala Advantage: It is endowed with unique natural resources and is supported by a
thriving Diaspora. The business has a wide scope for development in Kerala due to the
following advantages possessed by it:
a) It has strategic location on the trans-national trade corridor and well-connected
road and train network.
b) It has three international airports and has international seaport with container
cargo handling facility at Cochin.
c) It has excellent communication network.
d) There is a highest density of science and technology personnel.
e) Kerala has 100% literate work force.
f) It has highest physical quality of life index.
g) It has abundance of natural resources such as minerals, marine products, and
agricultural products.
h) The accelerated industrial growth in the state is nearly 9%.
i) A good management culture is created and a cordial industrial and labour relation
is maintained in the state.
j) Necessary assistance is provided for marketing of industrial products in the state.
High Quality Human Capital and Social Development: Kerala has enviable human
resources. The state scores the highest among all Indian states on the UNDP Human
Development index.
Traditional Areas of Strength: The state is now one of the highest earners of tourism
revenues in the country and one of the world’s premier tourist destinations. The state is
also the leading producer of natural rubber, coconuts, pepper and cardamoms and the
second largest producer of tapioca, cashew nuts and coffee.
Economically Successful Diaspora: Non Resident Indians from Kerala are
economically successful and remit significant amounts to their home state.
Top Quality Infrastructure:
Investment Climate: A study conducted by the CII (Confederation of Indian Industry)
on the attractiveness of the states in attracting investments rated Kerala as the third best
in the country in overall ranking.
A company's merchandise, raw materials, and finished and unfinished products which have not yet been sold. These are considered liquid assets, since they can be converted into cash quite easily.
Policies, procedures, and techniques employed in maintaining the optimum number or amount of each inventory item. The objective of inventory management is to provide uninterrupted production, sales, and/or customer-service levels at the minimum cost.
Techniques: -
• ABC
• JIT
• FSN
• VED
• BILLS OF MATERIAL
• BIN CARDS
• EOQ-ECONOMIC RE-ORDER QUANTITY
• INVENTORY/TURNOVER
It has always been important for a business to know and understand how it fits in and interacts with the surrounding environment on both an internal (office/factory/shop environment) and external view (how your business operates with the outside world). Researching your environment will benefit you and/or your management team by putting you in a position to develop a strategy for both the long and short term.
Analyzing the Business
The most influential way of doing this is to perform a SWOT analysis of the company. It is a common phrase used to abbreviate Strengths, Weaknesses, Opportunities and Threats. Each term is a heading for a separate analysis of the business but they can be related as seen below: Strengths provide an insight to your business opportunities & weaknesses in your business can cause immediate threats A guideline of how to carry out the analysis is explained in the next section, but it is important to know that the SWOT analysis is only based upon information that is known by the assessors (you), and is seen as perhaps the more basic approach of analyzing a business‟ position: but SWOT is still a powerful tool when looking for immediate benefits.
Performing SWOT
Recognizing the Strengths and Weaknesses before tackling the Opportunities and Threats is the best way to approach the analysis: the more Strengths and Opportunities the better they can both be seen as the bigger influences for the success of your company. You need to be aware that the most important rule is not to leave anything out no matter how small the issue may be. There is no fixed way of doing a SWOT analysis, but it should be done in a way that you feel most comfortable with, and more importantly that you understand it. The objective is to be in a position where you can determine a strategy for the future to improve your company‟s overall performance (or maintain it if you are happy with your final analysis).
Strengths
The Strengths can be considered as anything that is favourable towards the business for example:
1. Currently in a good financial position (few debts, etc)
2. Skilled workforce (little training required)
3. Company name recognized on a National/Regional/Local level
4. Latest machinery installed
5. Own premises (no additional costs for renting)
6. Excellent transport links (ease of access to/from the Company)
7. Little/non-threatening competition
Weaknesses
Recognizing the Weaknesses will require you being honest and realistic. Don‟t leave anything out as this is an important part as to realize what needs to be done to minimize this list in the future. Here are a few examples:
1. Currently in a poor financial position (large debts, etc)
2. Un-Skilled workforce (training required)
3. Company name not recognized on a National/Regional/Local level
4. Machinery not up to date (Inefficient)
5. Rented premises (Adding to costs)
6. Poor location for business needs (Lack of transport links etc)
7. Stock problems (currently holding too much/too little)
8. Too much waste
Opportunities Keeping in mind what you have listed as your Company Strengths, SWOT Analysis can now influence the Opportunities for the business. These can be seen as targets to achieve and exploit in the future for example:
1. Good financial position creating a good reputation for future bank loans and borrowings
2. Skilled workforce means that they can be moved and trained into other areas of the business
3. Competitor going bankrupt (Takeover opportunity?)
4. Broadband technology has been installed in the area (useful for Internet users)
5. Increased spending power in the Local/National economy
6. Moving a product into a new market sector
Threats
The final part of the analysis will also be seen as the most feared- the Threats. It has to be done and therefore taking into account what you have listed as your weaknesses, the threats will now all seem too clear. Examples
1. Large and increasing competition
2. Rising cost of Wages (Basic wage, etc)
3. Possible relocation costs due to poor location currently held
4. Local authority refusing plans for future building expansion
5. Increasing interest rates (increases borrowing repayments, etc)
6. End of season approaching (if you depend on hot weather, etc)
7. Existing product becoming unfashionable or unpopular
Using the Analysis
Once the SWOT analysis is complete, it will then be time to put it all together and look closely to form a strategy. This will involve how you can exploit the Opportunities and how to eliminate or deal with the Threats. This may well depend on your company‟s original objectives and goals but the whole process will certainly give an overall look at the current position of your business. You might argue that you can make a list in your head about the areas that make up your analysis and that no benefit can be derived from a SWOT exercise. Try a quick list with the four areas and identify where one area impacts on another. If you find one instance that is a current issue, you would then have cause to complete the full analysis.
Summary
As previously stated, SWOT analysis is used primarily to evaluate the current position of your business to determine a Management strategy for the future. It should also help you to look at how you may do this by looking closely at your Weaknesses and Threats that you have identified. Great care needs to be taken when planning a strategy not to disturb the balance of your Strengths as you could find that your Strengths suddenly become a Weakness if you don‟t use them. The way that SWOT has been introduced to you is the simplest way that it can be found. It can be used further to analyze your business (depending on its size) on a Local, National and Global level. This is done by splitting up the Strengths, Weaknesses, Opportunities and Threats of your business into the appropriate category (e.g. High Unemployment in the area- Local Threat because of less spending). It cannot be stressed enough that the analysis is carried out fairly and thoroughly. This will then put you in a position to forecast and prepare for the future accurately to give realistic objectives and tasks.
There are two main financial institutions available for loans for entrepreneurs on the (federal/ all India level). 1. Industrial Development Bank of India(IDBI) 2. Industrial Finance Corporation of India (IFCI) The Industrial Development Bank of India is the head institution in the area of long term industrial finance. It was established under the IDBI Act 1964 as a wholly owned subsidiary of RBI and started functioning on July 01, 1964. Under Public Financial Institutions Laws (Amendment) Act 1976, it was delinked from RBI. IDBI is engaged in direct financing of the industrial activities The objectives of the Industrial development bank of India are to create a principal institution for long term finance, to coordinate the institutions working in this field for planned development of industrial sector, to provide technical and administrative support to the industries and to conduct research and development activities for the benefit of industrial sector. On the State level finance is available loans can be availed from 1. State Financial Corporation (SFC) 2. State Industrial Development Corporation (SIDC).
Criteria for Business loans: √ Technical assessment of project √ Experience of the entrepreneurs √ Financial & commercial practicality of the project √ Conformity to environmental laws √ Economic viability of the project How to apply for business loans in India – Loan application procedure
The first step is to submit a detailed project report (business plan)to the financial institution to IDBI, IFCI or any other financial institution from where the loan sanction is sought. In case a license is a requirement for the project, the license should be provided with the project report.
The financial institution after scrutinizing the project report. If the financial institution requires additional information or clarifications, they usually ask for this in a few days of receipt of project report.
Representative from the financial institution will arrange to inspect the site etc to make certain the suitability of the project. At this stage discussions on various aspects of the project are discussed and final project costs are calculated.
The financial institution gives its approval if they find the project feasible.
Loans provided for business ventures can be for equipment and fixed assets as well as working capital. While there is no hard and fast rule that is revealed by financial institutions. I would say that if a project is viable and the entrepreneur has approximately 25% of his own funds. Then 75% can be financed. In addition to this loans can be availed for working capital also. In case you can provide proof of your expertise in the project there is always the possibility that your loans may be sanctioned with a lesser amount of cash investment on your part. Projects costing up to Rupees 5 crores can normally be financed on the state level. Financial institutions follow guidelines such as debt-equity ratio, entrepreneur‟s contribution to the project etc when deciding on loans. It is not uncommon for applicants to inflate their contributions in an attempt to invest the least amount of their own funds.
The Government of India as well as several State Governments provides several benefits and incentives to promote industrialization of backward areas. Both the central and state governments share the cost of some of the incentives provided. The purposes of such incentives are to develop backward areas and increase employment for local inhabitants of such areas. The bulk of new industries prefer areas with an established infrastructure and this is why incentives are offered to entice new ventures to start up in areas that need development. Incentives offered depend on the specific area chosen.
Some of the incentives offered are:
Transportation subsidies to promote industries in areas that are not easily accessible, like remote hilly areas. A subsidy of 50% to 90% on transportation costs is available under this scheme.
A Subsidy at the rate of 15% of the investment amount in plant and machinery is given under the capital investment subsidy scheme.
A subsidy for interest relief is also provided at a rate of 3% for new industrial units in some areas.
While in the past setting up an industry in India was not an easy task because of bureaucratic requirements that needed to be fulfilled. However both the central and state governments have now made efforts to improve some things. Industrial Unit Startup Information for NRIs For Non Resident Indians returning to India to start up industrial units. They will find that there is plenty of talent available in India. Hiring the right kind of person can make things quite easy to go through the maze of Indian regulations. While the government no doubt is trying to bring out reforms to make things easier for foreign investors, the attitude of some officials is difficult to change. Those who encounter problems should use the several channels available now to report clerks use delaying tactics for personal gain. Returning NRI's who can tolerate the initial adjustment setbacks in establishing themselves when they return to India will ultimately find the rewards well worth the effort. India offers investors tremendous opportunities and is presently one of the most sought locations for industrial investment
